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20 October 03. An annoying economist trick

So Jack Snow, Secretary of the Treasury, stopped by for lunch. We had lunch in the press room, which made it feel like a press conference with salad.

Secretary Snow has been around: he was a professor of Economics for a while, head of a business coalition, stuff. Not a dumb guy. He was also smart enough to acknowledge that many of the people in the room knew more facts and/or were better economists than he.

So one of the primary points of interest among these economist people was around Bush's proposed tax cuts. Consensus among the economists was that they're a dumb idea, which will blow up the budget defecit to immense proportions. The logic being: if the government cuts taxes, it gets less money. See how that works?

Now, economists are enamored of something which some call `The law of unintended consequences', the gist of which is that everything is interrelated, so when you change one variable, you need to take into account everything else in the system too. The usual application is as follows:

1.Advocate of policy P makes a claim that it will change variable X for the better.
2. Opponent of policy P then invokes the law of unintended consequences, by expanding the framework to include variable Y. If the effect on variable Y is detrimental, then opponent satisfactorily proclaims that policy P is dumb and should not be implemented.

This has the rhetorical benefits that it makes the opponent look like a more subtle thinker, and allows him/her to keep pointing out variable Y every time anybody says anything about policy P. It has three rhetorical problems: it leaves open the question that maybe we could open up the framework a little further to include variable Z, where policy P is the best thing to happen to variable Z since frigging sliced bread; it fails to take into account the (often extremely difficult) question of whether the benefit to variable X outweights the detriment to variable Y; and after the third or fourth time opponent points out variable Y, it gets really annoying and frustrating.

So Secretary Snow points out that cutting taxes will help to make the economy more efficient. A more efficient economy means a larger tax base, and therefore more tax revenue.

We can apply the above critiques in sequence: it doesn't take into account other possible expansions of the framework, like how not taxing dividends breaks the corporation-as-person metaphor, and allows for shifty dealing between the CEO's personal accounts and those of the corporation. Don't tax dividends, and suddenly every corporation is going to be paying huge dividends instead of paying salaries or keeping that money in the corporation.

Next, it doesn't take into account the relative weight of two effects: we've cut tax rates but raised the tax base. Determining which effect will prevail is a hard question, which we should defer to the economists who put out the effort to analyze this question in detail. Their verdict: there is no fucking way that the expanded tax base will make up for the cut in rates. The cuts will absolutely, positively, balloon the budget deficit. This is using any model you want, including the super-optimistic model of the Congressional Budget Office, which reports to Secretary Snow.

The sad part comes from that third critique of the law of unintended consequences: confronted with a room full of really smart economists (and me) who were unanimously in agreement that making these tax cuts permanent is a supremely bad idea, he had no recourse but to annoyingly keep repeating that the tax base will grow. He did this in a number of ways, affably joking about how those silly people in the business press don't know the difference between debt capital and equity capital (like it matters here), talking about how we need to encourage innovation, and the other usual neoconservative chestnusts.

Though the lunch was `off the record', I don't really feel that I'm betraying anything here: somewhere between most and all sane economists agree that Bush's tax cuts will expand the deficit---at a time when Baby Boomers are about to start claiming social security and the USA needs to rebuild Iraq, since it's broken; and Secretary Snow stands by his boss in supporting these cuts. The big question I'm left wondering is whether Secretary Snow believed what he was saying. He's married to this position, either by his own beliefs or those of President Bush; how many experts does it take to get a person to divorce himself from a bad belief?
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10 January 04. Go, Dubya

Hey, you've gotta give credit when something goes right. Last week, George W Bush proposed a plan to give legal documentation to millions of immigrant workers. ``Our current limits on legal immigration are too low'', President Dubya said.

This rocks. Politically, it is obviously a pandering to Latino voters, who are the only minority which has shown any willingnes to vote for Republicans. But when has a policy ever not been pandering to somebody. The basic mechanism as proposed is that those who are now in the country without documentation can get a guest worker status, and those who have documented jobs three years from now will be able to stay in the country.

The overall gist is that those who are working outside of the system can now work inside it. Of course, the system itself will be increasingly hostile to them. The first point is that U.S. employers who want to hire a guest worker will first need to try to hire a native. The current law requires this, but isn't really enforced. ``Our government will develop a quick and simple system for employers to search for American workers,'' the Commander-in-chief explained. I guess he means Monster.com with enforcement capabilities.

But along with new digital fingerprinting requirements, the focus on a panoptic technology is a bit intimidating. ``This month, we have begun using advanced technology to better record and track aliens who enter the country---and to make sure they leave as scheduled.'' In other words, people who now exist illegaly can make their status legal, but as soon as they do, they will be carefully tracked.

It's not scary that there's lots of neatly collated data out there: if the government wants to run Monster.com, or it wants a fingerprint as well as a photo on every visa, I have no problem with that. [U.S. visas have had digital photos since the technology was viable over a decade ago.] It seems fair enough to me that if somebody claims to be somebody, then verifying that claim with a fingerprint or such is not a big deal. My fingerprints are with the FBI, since I used to work at a brokerage firm, and I don't really care.

The scary part comes in what they wish to do with that information, which seems to be to track immigrants as closely as possible. They need to be associated with an employer, and as a compromise with the red-blooded xenophobes, the government will make that as difficult as possible. If they aren't associated with an employer, or they fail any of the other paperwork hurdles the US CIS (formerly the INS) is famous for, then the government will use as much information as it can get to track the person down and have him or her forcibly moved out of the country.

So if this proposal achieves one of its main goals---making it easier to deport people whom the database says are illegal---then we can't expect it to achieve its other goal---getting people who are currently out of the system enthused about registering. But on the margin, this will help some people who really will be better of normalizing their status, and will allow some percentage of people to enter the country legally. It will, on the margin, make for less work for the border patrol, since they'll have more people with reliable paperwork whom they don't have to strip-search. But sweeping reform it ain't, because entering the system comes at a cost of increased scrutiny, and the people involved have been trained for decades to not trust U.S. authorities when they say `trust me'.

One last note: the plan includes a clause that social security taxes would be held in escrow, and if the guest worker goes back to Mexico, the taxes and attendant retirement benefits go back with the migrant. I haven't seen the details, but this is a great idea. Yay, Dubya. Twenty or thirty more propsals like this and I'd forgive you for John Ashcroft, $87 billion in `reconstruction of stuff we blew up' expenses and over 7,900 deaths.
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06 March 04. Huddled Catholic masses

A funny thing Ms. MTIAM of Bacolod, Philippines sends the following amusing anecdote:

------------------

On my way back to this fair land of ours. As most of you know, I became an American citizen in 1995 and one of the privileges of that legal status was the right to an American passport that would allow me to come and go as I please.

But [...] a young Asian American manning the immigration booth at the Honolulu International Airport said she saw something in my passport that was suspicious. She did not open the passport, just kept looking at my picture through a loupe. She then called her supervisor, who takes a look at my picture and says, it's fine. Undeterred, [...] my officer puts my passport in a blue folder and calls a person who brings me to the "holding" room where I am to be interviewed.

Why is that? I am the only American citizen in this room. I hear one of the interviewers tell this lady coming into the country that she can't come in, she has to go to the transit area and return to her country. Where would I go back to? The Philippines? Where I am no longer a citizen? What if they don't let me back in???

[...] Then I said, OK, I am late already, I am concerned about the person who is to meet me. Can I use your phone to call him?

No, no phone calls are allowed. After about 40 minutes, I am interviewed. This guy, the only one there who is NOT Asian American (by this time the room is filling up and I am STILL the only American in there), takes a second to look at my passport and pronounces it good. [...]

Now that I have thought about it, questions abound. What gives an undereducated, obviously undertrained woman the right to pull a passport even after her supervisor says it's OK??? What are our rights now, in this time of homeland security, in this age of presumptive guilt? [...] How does one disprove a negative? [...] I was not allowed to call anyone? I could have disappeared and none of you would have known that. What then?

------------------

Ms. MTIAM makes an enthralling point, which riles many an immigration scholar: immigration law is enforced not by a bevy of judges and lawyers with the immigration laws at hand, but by folks like our ``obviously undertrained'' passport checker there. She probably has some modicum of training to look for the indications that the passport is valid (shiny confetti on the binding of the inside back cover, some state seals turned the wrong way, some deliberate typos I can't recall), but she probably does not have the US Code's immigration section at her fingertips.

Consider a more difficult case such as an asylum application. Applicant arrives at the airport with a valid ticket but no visa, claiming that she is fleeing and expects to be granted asylum. If she's wrong, and after a lengthy trial is returned to her home country, then the airline is obliged to return her, free of charge. The airline, a private company, will take this into account when deciding whether to honor her ticket or not.

In fact, when I say, `the airline', I mean the guy at the counter, who has zero training in immigration law. That guy, not the United States Judicial system, will decide upon whether the asylum-seeker has a valid application, while other passengers stand in line behind her. That guy has little at his disposal but an overall impression of immigration law: if the President of the receiving country has spent much time stumping about how we're taking a strong line at our borders and will process applications with much more vigilance, then the guy at the counter will receive that message---without the accompanying hundreds of pages of carefully written protections.

From 2001 to 2003, asylum applications have fallen from 66,000/year to 49,000/year, a 26% drop. [The latest stats show a decline for Jan 2004 too.] Either the world is 26% safer and nobody needs asylum anymore, people are afraid to apply for asylum here in the States, or they are being preemptively turned away by the sort of people Ms. MTIAM ran in to. I'm disinclined to believe that first option there, leaving us some mix of the other two. If the rhetoric spewing forth from a country is anti-immigrant, then that rhetoric will push people away, whether their claims would be valid under careful scrutiny or not, and regardless of how many due process protections are put in place to dilute the rhetoric.

Speaking of which... Here's an article from Foreign Policy magazine entitled, ``The Hispanic Challenge''. All told, it's more of the same that we've always heard: the old stock of immigrants were so much cooler than the new stock of immigrants, so although we're a nation of immigrants, we should bar the door now. But it's especially fun because it's in a well-respected journal (and by what I am told is a well-respected author), yet it makes almost no effort to hide the fact that it's racist. For example, a consistent thread through the article is that the United States was founded by Protestants, and yet these Mexican immigrants are Catholics. Color me a dumb Jew, but I didn't even know there was a difference until my European history class in high school. Yet our author here feels that distinguishing among different types of Christian is of vital import to the well-being of the U.S.A.

He also points out (see the tables at the end) that Hispanics intermarry less frequently than other races (using Asian chycks for comparison), proving that they fail to assimilate properly. I just love that this guy is using intermarriage statistics to support his argument about immigration law. No beating around the bush here! [Though, it's the opposite spin from olden days, when intermarriage meant that dark-skinned men are stealing our women. The story here is that all these Mexicans are immigrating to our country, and we still won't be able to get any Latina tail.]

All told, the article does the stuff that racists always do: it points out the cultural superiority of us versus them, homogenizes both sides, even though both sides (especially the U.S. side) are incredibly heterogeneous, all the while ringing the alarum bell about the downfall of our people to the flood of outsiders.

As for that part, by the way, the foreign born population of the U.S.A. in 1900 was 13%, and it is now 11%. Quite the flood there. He also fails to discuss where the demographic shifts in immigration come from---he indicates that it's a Mexican reconquista, but much of it is just a lessening of the racism in U.S. immigration law over the last century.

Anyway, just giving you a taste of the fun to be had when you click that there link. I was thinking of sending in an editorial to FP, since letters to the editor are the primary output of (name of think tank). But, as we say on the Net, `don't feed the trolls', so I'll just leave it at this here commentary.
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on Wednesday, October 20th, Eric said

While i can only go from your summary of the article, and not the article itself, as i do not have a subscription to FP, why is it racist to want people to assimilate?

Im all for immigration, hell, some of the hardest working people i know are immigrants. i want immigrants to retain the best parts of their culture, but i would also love for them to embrace the culture of the country to which they are immigrating (im canadian btw). why is it unreasonable to desire this in immigrants. if they dont want to embrace the native culture of their new 'home', then why leave the emigrating country in the first place.

i am extremely patriot, and love my country. id like to think im open to immigration, but is it really racist of me to not want the culture of the country i grew up in to be 'lost' because these new comers are failing to embrace it. about 50% (if not more) of the population of toronto, canada are immigrants who have arrived here within the last 10 years. thats great they want a better quality of life, and i love to support local & small businesses. and yes, id love to know what life is like back in the originating countries of these immigrants, but i dont think its unreasonable for me to want them to embrace the culture that ive grown up in, after all, they are the ones who have choose to come here.

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30 April 04. Why is the ETS lobbying against immigration?

This report came across my desk; thanks Miss MK of Washington, Columbia. It's from the Educational Testing Service, the people you had to take the SAT from, and is entitled "A Human Capital Concern: The Literacy Proficiency of U.S. Immigrants".

It reports on some literacy tests run on foreign-born and native-born folks in the U.S.A.; the question that immediately springs to mind is, what language is the test in? It turns out that ETS has two tests, the National Adult Literacy Survey (NALS) and the International Adult Literacy Survey (IALS). At no point, over the entire sixty pages, does it tell you what language the tests are in. OK, it indirectly points out that the NALS scores indicate English proficiency, but I couldn't even find indirect evidence of the language the IALS was in. I was further frustrated by the fact that the report uses the term "literacy" throughout, and at no point that I could find qualifies it to "English literacy".

This is important because immigrants did significantly poorer on these tests than natives. If both tests are in English, then this is entirely unremarkable. If the IALS is in the immigrant's native tongue, then this points to a low level of what some migration scholars like to call the `quality of immigrant'.

Between my linguist pal at ETS and Google, I was able to find out that the NALS is indeed in English, and the IALS is in the national language of the country, and English for the U.S.A. That is, if somebody in the U.S. is selected to take the exam, then the IALS will be in English regardless of where the person lived before. Which means that the tests support the dull result: non-native English speakers don't fare as well in tests of English.

But check out the title again: "A Human Capital Concern". Here's a line from the report's cover letter when it was sent to (name of think tank): "...the nation needs a spirited debate about how to boost the human capital of this growing population [of immigrants]." How did we go from the obvious "native English speakers speak better English" to "immigrants have low human capital"?

Even the "growing population" subclause is a bit suspect. From page 1 of the report: "New immigration reached historically high levels during the decade of the 1990s..." Yeah, in absolute terms. In percentages, the 1990s were sort of middling.

Other research on the `quality of immigrant' generally finds that immigrants are not of exceptionally low quality. The poorest of the poor don't move; it's the moderately educated lower-middle class and above that have the wherewithal to change countries. So if the ETS were to claim that immigrants were in the bottom quartile of literacy for their native language, then this would be an innovative finding. But that's not what they find.

By page 11 I was in fits. "...the differences in mean test score performance between the native and foreign born were equal to 1.0 to 1.1 standard deviations. From both a statistical perspective and an educational policymaking standpoint, these are extraordinarily large differences." Most statisticians prefer to call a 1 SD difference a `null result' or `insignificant', but maybe they're just not as perky and excited as the ETS people.

They have a few measures of civic involvement, and find a negative correlation between these and literacy. One of these measures is library attendance.

They show (p 46) that people who score better on the tests were more likely to have been taking some sort of education/training course in the past 12 months, indicating that better English implies more facility to learn useful skills. But they fail to mention whether these training courses could have been ESL classes, which would send the causation in the exact opposite direction.

I could go on. But my big question is this: why did ETS publish this? These guys have a large academic staff who often publish in peer reviewed journals---but before they do, they have to pass an internal peer review process. You may hate the idea of standardized testing, but these guys live and die by compiling the most statistically sound and defensible standardized tests humans can compile. So why are they publishing a polemic with tables?

Nor did it have to be this way. This could have been a paper about ESL programs and their efficacy, or about the demographics of English adoption. All this would have been useful, interesting, and not a stretch of the data. But instead, the report stretched the data well beyond what it could possibly support, and did so through misleading language (like refusing to admit that by "literacy" they mean "English literacy") and not-so-hot statistics (like the above standard deviation faux pas, and many paired t-tests when they should have been running at least a linear regression controlling for age and years of schooling).

So I'm not sure what's up with the ETS. My pal points out that (apart from the internal peer review) individual scholars can independently publish anything they darn well please to, but this isn't just another journal article by ETS employees; it has the ETS logo all over it, is (c)2004 ETS, and has a lengthy preface signed by the Senior VP of research. The report itself, with fifty tables, glossy cover, and evidently a mass mailing to the think tanks of the world, looked like a big deal that a large number of people took seriously. Yet the main conclusion from the title on down, that immigrants have low human capital, is completely unsupported by the data.

Dear ETS: You do good standardized tests. But please get out of the lobbying business.
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30 August 07. Neil Diamond, "America"

[PDF version]

This song should be the USA's national anthem.

It is the only song about the United States of America that doesn't just make me cynical. The current anthem is something about watching a battle over Baltimore's Fort McHenry, which is not something many of us can really relate to. Other songs that are more direct and just keep saying things like “at least I know I'm free” just remind me of the eternal vigilance that is the price of that freedom, and how many little flaws that freedom has today.

I once heard an ad executive on the radio, talking about how the USA can sell itself to the parts of the world that dislike it. Sorry, I'm not going to be able to find you a proper reference. He said that if you gave his agency a million bucks, it wouldn't be able to come up with a better tag line than the land of opportunity. It's a moniker that says nothing but optimism, hope, and prosperity.

So that's why I love Neil Diamond's America. Despite an occasional jump to third person, it's from the perspective of the people who still have that optimism that things will be better in the USA, and feel that it's worth giving up everything for that optimism. It has impact because there really are people like that, and we all recognize that expressing your optimism about a country by leaving behind friends, family, and everything you know means a lot more than expressing love of a country with a bumper sticker.

When I was a kid, by the way, this was one of only two or three English-language albums that we had in our collection (being that I'm an immigrant myself; see prior column). So part of my affection for the song is that I heard it a few hundred times. I always thought the cover of Hot August Night looked smarmy, though, and perhaps it's why I still dislike jeans jackets.

Of course, it'll never become our national anthem, because it's about immigration, from the first person perspective. It's about a naïve optimism about the Land of Opportunity.

Here is a snippet from a New York Times article about a pair of anti-immigration politicians:

[The anti-immigrant politicians'] main arguments for ridding the town of illegal immigrants come down to this: their presence has led to both rising crime and overcrowded schools. As it turns out, however, the crime rate in Carpentersville has actually been cut in half over the past 10 years; and while the schools were, indeed, overcrowded four to five years ago..., class sizes have now been reduced — although it did require the passage of a tax referendum. [From “Our Town”, by Alex Kotlowitz Published: August 5, 2007]
It is much like a dozen comparable anecdotes from all over the country (e.g., here).

Opponents of immigration present a standard syllogism for why the USA must bar the door: (1) the USA is fast going downhill, (2) it is going downhill because of immigrants, and (therefore) we must bar the door to immigrants. Without premise (1), the conclusion loses its power. Without premise (1), immigration opponents are left with abstract economic arguments about how things are OK now, but will all fall apart any minute now--and even that is only plausible when there is some tangible present evidence that opportunities are only barely forthcoming.

In short, opposing immigration requires manfuacturing a perception of scarcity.

More next time.



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